Eurotunnel, the debt-laden Channel tunnel operator said today it would cut jobs and services in a bid to boost margins as it unveiled its long-awaited recovery plan.

The company, which is facing mounting interest payments on £6.4bn of debt, said it was still in a vulnerable position and needed to reduce its debts. It is in talks with its banks about reaching a sustainable level of borrowing.

"A number of different hypotheses are being developed with a view to putting in place the appropriate financial and legal framework within which negotiations could ultimately be conducted," Eurotunnel said in a statement.

Eurotunnel had until the end of the month to provide its bankers, HSBC and Credit Lyonnais, with a three-year business plan. The lenders have indicated that if they are dissatisfied with the plan, they could take steps towards seizing control of the business.

Last week, the company - now controlled by a French board after rebel shareholders seized control at April's annual meeting - reported disappointing passenger numbers. It said operating revenue had slipped 4% to £140m in the three months to September, with the number of cars using its shuttles falling 5% and the number of trucks by 4%.

Today's plan did not specify how many services would be cut or how many jobs would be axed from the 3,000 strong workforce. Eurotunnel said it was too early to give figures, although it did say it aimed to boost operating margins by £70m by 2007 and change its truck shuttle service for road hauliers.

"These measures alone will not be sufficient to safeguard our future beyond the demanding challenge of the next two years," chief executive Jean-Louis Raymond admitted. "In reality the financial structure of the group remains fragile and the high financial charges continue to impact on operating results."

Eurotunnel has never recovered from the huge costs of building the tunnel and has been hit further by competition from budget airlines and price-cutting by ferry companies. The Anglo-French board was sacked in April after a 90% dive in its share price since flotation.

Mr Raymond blamed last week's figures on the old board.

"These figures demonstrate that Eurotunnel 's previous strategy was not adjusted to market trends in terms of capacity and pricing," he said.

Creditors are believed to be sceptical about the unorthodox new board, however. It includes a right-wing French MP, Pierre Cardo, and a former JP Morgan banker, Herve Huas, who is under investigation for money laundering.